Sebi floats discussion paper to plug gaps in buyback regulations

Presently, there is ambiguity on whether standalone and consolidated financials should be considered by evaluating various thresholds and conditions for buybacks

The Securities and Exchange Board of India (Sebi) on Wednesday floated a discussion paper to plug gaps in the buyback regulations. 

At present, there is ambiguity on whether stand-alone and consolidated financials should be considered while evaluating various thresholds and conditions for buybacks. A company is permitted to conduct a buyback if its debt-equity ratio doesn’t exceed 2, after repurchase of securities. 

However, neither the Companies Act nor Sebi buyback regulations specifically provide for consideration of stand-alone or consolidated financials for determining the requirement of debt-equity or free reserves. In the paper, Sebi has proposed that debt-equity ratio be considered on a